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Company: Elizabeth Arden (RDEN)
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  Celebrity endorsements only take you so far

Elizabeth Arden relies on celebrity endorsement, not product quality or brand equity, to drive sales. Demand for Elizabeth Arden products is thus dependent on highly variable and short lived celebrity appeal and reputation.

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  No investment in the core business

Elizabeth Arden makes no commitment to research, development, or product innovation. In its own words, research and development expenditures are "not material."

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  Dependent on weakening perfume market

The majority of Elizabeth Arden's revenues are derived from its fragrance products, a weak product category that is expected to experience declining sales volumes in the United States through 2010.

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